--- title: "Securing Retirement Futures: Strategies to Address Delayed Retirement" description: Address delayed retirement in your workforce by optimizing 401(k) plans with automatic enrollment, HSAs, and more. Improve outcomes for your Chicago employees. image: https://www.bjorkgroup.com/hubfs/Bjork%20Group-Addressing%20Delayed%20Retirement.jpg --- [BjorkGroup ![bjork group](https://www.bjorkgroup.com/hubfs/images/logo.png)](https://www.bjorkgroup.com/) ![bjork group](https://www.bjorkgroup.com/hs-fs/hubfs/images/print-logo.jpg?width=285&height=37&name=print-logo.jpg) Toggle navigation - [Benefits Consulting](https://www.bjorkgroup.com/benefits-consulting-services) - [Health & Wellness](https://www.bjorkgroup.com/benefits-consulting-services/health-and-wellness) - [HR Administration](https://www.bjorkgroup.com/benefits-consulting-services/hr-administration) - [Employee Onboarding](https://www.bjorkgroup.com/benefits-consulting-services/employee-onboarding) - [Regulatory & Compliance Solutions](https://www.bjorkgroup.com/benefits-consulting-services/regulatory_and_compliance_solutions) - [Retirement](https://www.bjorkgroup.com/benefits-consulting-services/retirement) - [Employee Communication & Enrollment](https://www.bjorkgroup.com/benefits-consulting-services/employee-communication-and-enrollment) - [Payroll](https://www.bjorkgroup.com/benefits-consulting-services/payroll) - [Cost Benchmarking & Optimization](https://www.bjorkgroup.com/benefits-consulting-services/cost_benchmarking_and_optimization) - [Technology](https://www.bjorkgroup.com/technology) - [Benefits Administration Systems](https://www.bjorkgroup.com/technology/benefits-administration-systems) - [HR Data Analytics](https://www.bjorkgroup.com/technology/hr-data-analytics) - [Private Insurance Exchange Solutions](https://www.bjorkgroup.com/technology/private-insurance-exchange-solutions) - [By Company Size](https://www.bjorkgroup.com/solutions-by-company-size) - [Small (2–99)](https://www.bjorkgroup.com/solutions-by-company-size/small-two-ninety-nine) - [Medium (100–1,000)](https://www.bjorkgroup.com/solutions-by-company-size/medium-one-hundred-one-thousand) - [Large (1,000+)](https://www.bjorkgroup.com/solutions-by-company-size/large-one-thousand-plus) - [Resources](https://www.bjorkgroup.com/resources) - [Case Studies](https://www.bjorkgroup.com/case-studies) - [White Papers](https://www.bjorkgroup.com/white-papers) - [About Us](https://www.bjorkgroup.com/about-us) - [Our History](https://www.bjorkgroup.com/about-us/our-history) - [Our Values](https://www.bjorkgroup.com/about-us/our-values) - [Blog](https://www.bjorkgroup.com/blog) - [Contact Us](https://www.bjorkgroup.com/contact-us) ![img description](https://www.bjorkgroup.com/hubfs/images/banner-img03.jpg) # Blog - Blog ## Securing Retirement Futures: Strategies to Address Delayed Retirement - Bjork Group - November 18, 2024 ![Bjork Group-Addressing Delayed Retirement](https://www.bjorkgroup.com/hs-fs/hubfs/Bjork%20Group-Addressing%20Delayed%20Retirement.jpg?width=700&height=400&name=Bjork%20Group-Addressing%20Delayed%20Retirement.jpg) *Does your 401(k) plan design support “on time” retirement?*   Delayed retirement is becoming increasingly common among Americans, impacting employers’ bottom lines, talent acquisition cycles, and overall productivity. A recent survey found that one in four employees anticipate working beyond their initially planned retirement age, and 9% fear they may never be able to retire.[\[1\]](https://www.bjorkgroup.com/blog/securing-retirement-futures-strategies-to-address-delayed-retirement#_ftn1) This data supports a longer-term trend: since the early 1990s, rising labor force participation among older workers has lifted the average retirement age in the United States by three years.[\[2\]](https://www.bjorkgroup.com/blog/securing-retirement-futures-strategies-to-address-delayed-retirement#_ftn2) ## Impact of delayed retirement on employers These findings have important implications for employers. While retaining seasoned, skilled employees with institutional knowledge and strong customer relationships has significant benefits, it also exacts a price that may affect management strategies, employee morale, and operational expenses. A recent study quantified the cost of delayed retirement on employers and found:[\[3\]](https://www.bjorkgroup.com/blog/securing-retirement-futures-strategies-to-address-delayed-retirement#_ftn3) - **A one-year delay in an employee’s retirement** had an incremental cost of about $50,000, assuming one employee’s retirement resulted in other employees advancing up the corporate ladder and an entry level employee being hired. - **A** **one-year increase in average retirement age across a company’s workforce** resulted in an average incremental cost of 1% to 1.5% of aggregate annual workforce expenses. For an employer with 100 employees and workforce costs of $10 million, a one-year delay in retirement age could cost from $100,000 to $150,000. It’s important to note that this analysis might understate the true cost of delayed retirement because of qualitative effects, such as the impact of delayed promotion, and limited advancement opportunities on employee morale, productivity, and turnover. ## Strategic plan design supports “on time” retirement Over the last decade or so, automatic enrollment, automatic escalation, and managed account advice have significantly improved retirement plan participation and savings rates.[\[4\]](https://www.bjorkgroup.com/blog/securing-retirement-futures-strategies-to-address-delayed-retirement#_ftn4) Now, employers are emphasizing the importance of additional features that can help employees save enough to retire on time, at full retirement age. These include: - **Health Savings Accounts (HSAs)** offer employees at companies with high deductible health plans (HDHPs) an additional tax-advantaged way to save. Any money not spent on healthcare can rollover and accumulate for future use. Building savings in HSAs can help near-retirees feel more confident about meeting healthcare expenses in retirement. In addition, after the age of 65, HSA funds can be used to pay non-healthcare expenses without a penalty. Distributions applied to qualified healthcare costs are tax-free, while those used for other expenses are taxed as ordinary income. - **Retirement income funds** are designed to provide a steady stream of income during retirement. They often include target date strategies that gradually shift allocations to more conservative investments, such as annuities, as retirement approaches. Some retirement income funds focus on generating a stable income through investments in financial markets, aiming for annual returns sufficient to support retirement needs. - **In-plan annuity options** give plan participants the opportunity to save and invest in guaranteed retirement income through their workplace retirement plans. Investing a portion of retirement savings in an annuity that will generate income for life can give near-retirees more confidence to retire. Income from an annuity can be augmented with income from other investments. The SECURE Act made it easier to add a lifetime income investment to a workplace retirement plan by eliminating a key obstacle—portability. Annuities can now be directly rolled over into IRAs, converted to individually owned certificates or moved to new employers’ retirement plans, if the plan accepts annuities. Strategic plan design can support employees, so they feel more confident about retiring on their own timeline, while also assisting employers overcome the costs and challenges related to delayed retirement. We are here to help if you have questions about optimizing your retirement plan strategies to promote on-time retirement and maintain a healthy workforce.   Bjork Asset Management 1033 Skokie Boulevard, Suite 210 Northbrook, IL. 60062 312.464.7072 312.464.7083 ClientCare@BjorkAM.com [www.BjorkAM.com](http://www.BjorkAM.com) Securities and Retirement Plan Consulting Program advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC. Other advisory services offered through Global Retirement Partners LLC, a registered investment advisor. Global Retirement Partners LLC and Bjork Asset Management are separate entities from LPL Financial. The LPL Financial representative associated with this website may discuss and/or transact securities business only with residents of the following states: CO, FL, GA, IL, IA, MN, NC, WI. This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. ©[401(k) Marketing](https://www.401k-marketing.com/), LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent.   [\[1\]](https://www.bjorkgroup.com/blog/securing-retirement-futures-strategies-to-address-delayed-retirement#_ftnref1) [Nationwide. “In-Plan Guarantees Survey Report.” Sep. 2023.](https://news.nationwide.com/download/0f90b5db-dd97-4fe0-a9f7-1090ee7a0b96/nationwideinplanguarantees-2023report.pdf) [\[2\]](https://www.bjorkgroup.com/blog/securing-retirement-futures-strategies-to-address-delayed-retirement#_ftnref2) [Munnell, Alicia. “How To Think About Recent Trends In The Average Retirement Age?” Jul. 2022.](https://crr.bc.edu/wp-content/uploads/2022/07/IB_22-11.pdf) [\[3\]](https://www.bjorkgroup.com/blog/securing-retirement-futures-strategies-to-address-delayed-retirement#_ftnref3) [Prudential. “Why Employers Should Care About The Cost Of Delayed Retirements.” 2019.](https://www.prudential.com/wps/wcm/connect/0ff715c8-1962-408d-8085-f36b99090b97/Why_Employers_Should_Care_About_the_Cost_of_Delayed_Retirements.pdf?MOD=AJPERES&CVID=mMoJUoL) [\[4\]](https://www.bjorkgroup.com/blog/securing-retirement-futures-strategies-to-address-delayed-retirement#_ftnref4) [Vanguard. “How America Saves.” Jun. 2024](https://institutional.vanguard.com/content/dam/inst/iig-transformation/insights/pdf/2024/has/how_america_saves_report_2024.pdf). ![Image](https://www.bjorkgroup.com/hubfs/images/dummy-img.jpg) Share THIS POST - 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